Is Paramount Ready to Raise Its Bid for Warner Bros. Discovery?

ByEric Vilas-Boas,a Vulture editor who covers streaming and animation. He won a New York Press Club Award for "The 100 Sequences That Shaped Animation" in 2021.

11:00 A.M.

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The Davids are heading back to the negotiating table.Photo-Illustration: Vulture; Photos: Taylor Hill/FilmMagic, Jeff Bottari/Zuffa LLC

Another week, another few yards of give-and-take in the slowwar for Warner Bros. Discovery. This morning the entertainment giant led by David Zaslav announced it would reopen talks withDavid Ellison’s Paramount Skydance, which has been attempting ahostile takeover of the home of Looney Tunes and Batmanfor months after losing the initial bidding war torival Netflix. Netflix’s winning bid was $27.75 per share for the company’s streaming and studios business, while Paramount’s offer was to buy all of WBD, declining cable assets included, for $30 per share. WBD’s decision to open talks back up again could kick this drama back into a higher gear.

After Paramount made some tweaks to its bid last week, WBD announced today that a “senior representative” from Paramount told a WBD board member that Paramount “would agree to pay $31 per share and that the offer was not PSKY’s ‘best and final’ proposal.” Paramount’s bid adjustments last week included a promise to cover the $2.8 billion breakup fee WBD would owe to Netflix should it renege on their $83 billion deal, plus a “ticking fee” of $650 million payable to WBD shareholders for every quarter that Paramount’s prospective deal did not close.

Paramount’s strategy has been to show that it had the smoother path to closing and global regulatory approval, and on their own those adjustments might not have moved the needle. But for weeks, industry observers have been waiting for Paramount to sweeten the deal by raising its bid by $2 or $3 per share. The big question is whether the company is ready to do just that. Netflix granted seven days, ending on February 23, to the WBD board to reopen talks with Paramount, as allowed under a “limited waiver” in WBD’s prior agreement with the streaming giant.

While it agreed to come back to the table, as of now, WBD’s board still unanimously recommends the company sell to Netflix and set March 20 as the date for a special shareholder meeting to put the matter to a vote. Netflix also timed a statement of its own alongside Warner’s, in which it emphasized that it had the winning bid and called “PSKY’s antics” a distraction.